Symantec is restructuring to help drive the security and information management agenda
When Steve Bennett took over as president and CEO of security and storage company Symantec in July 2012, and began a deep-seated review of the companyâ€™s products, processes, and management infrastructure, he had inherited an organization that looked a little too comfortable in its own skin. The reality was projected low growth from a product set that was in need of attention, a marketplace looking for the type of innovation that Symantec was struggling to provide, and a bloated middle-management infrastructure.
Symantec has a number of leading products, and in terms of market share, its consumer and enterprise security products hold a leading position. In addition, its data loss prevention (DLP) solution is significantly ahead of its nearest competitors, and NetBackup and Backup Exec are share-leading solutions in the large enterprise and mid-size markets. However, growth that has been underpinned by acquisition and the perceived requirement to react to insecurities in the market is now inhibiting future performance and the companyâ€™s ability to drive the security and information management agenda.
Change and improvement comes with a cost
In Ovumâ€™s opinion, Steve Bennettâ€™s root-and-branch review of products and operational efficiency was the appropriate way forward. Bennettâ€™s strategy, which involved detailed discussions with frontline employees and business stakeholders, has resulted in plans for change and improvement.
Part of the restructuring involves a review of working practices and management overheads, and tough decisions are being made that will inevitably lead to job losses, seemingly across middle management as different streams are combined or axed.
Symantecâ€™s short-term financial performance and profit targets take into account realistic restructuring and redundancy costs, which are expected to come in at around $275m. This has had an impact on profitability and growth predictions, which are flat for the coming year and at 5% for the following year, look modest in comparison to mainstream competitors. The projected increase in operating margin from 25% to over 30% is also significant. If achieved, this will be seen as a significant measure of success. When considered alongside the promise to increase the annual R&D budget â€“ currently around $900m â€“ these are commitments that should be applauded.
Symantec is setting targets for product improvement
Symantecâ€™s stated goal is ongoing improvement to its existing product portfolio. However, it is also looking to develop new innovative products and services that solve key and, in some cases, unsatisfied needs. The important challenge for Symantec is to address the market requirements for solutions that allow people and businesses to operate safely, without adding complexity.
The market for security and information management products and services is changing. Organizations, their employees and customers, as well as individual users are looking for greater levels of safety and choice. Across industry, and in consumer environments, more use is being made of external, often cloud-based resources, with access being made available from a whole host of mobile devices. Over time, Symantec customers will be making more of these choices, which is another reason why change is needed, why now is the right time for change, and why short and long-term strategies are required to meet market demands for safer computing.
The right timelines and product emphasis is vital for future success
The need to support user and business mobility and the increasing use of cloud-based services features strongly across Symantecâ€™s technology improvement approach. Due an overall development timeline of between six and 24 months, and the “bad guys” continuing to develop new and ever-more threatening approaches, it is vital that Symantec keeps its eye on the ball during this period.
Redevelopment aligns itself with three specific areas: simplicity of use, while helping people to remain productive and protected at work and at home; keeping business safe and compliant; and keeping applications up and running. The overall emphasis is on making it easier for businesses and users to be productive, and supporting both home and business environments with integrated solutions. This also looks to be the first time that integration between the Norton and Symantec products has been on the agenda, acknowledging the merging boundaries of consumer and business markets.
The restructuring of Symantecâ€™s products is wide-ranging, including archiving, backup, and recovery, clustering, discovery, and storage management solutions. These will continue to be leveraged to help solve high-level customer problems such as business continuity. On the security side, it includes among others endpoint protection, mobile and consumer security, encryption, user authentication, and DLP. To achieve these objectives, Symantec is focusing on 10 key product areas for future development: Mobile Workforce Productivity; Norton Protection; Norton Cloud; Information Security Services; Identity/Content-Aware Security Gateway; Data Center Security; Business Continuity; Integrated Backup; Cloud-Based Information Management; and its Object Storage Platform.
It is intended that clients will still be able to pick and choose their technology solutions, but the starting point will involve a broader menu of options to fit the risk profile and data management requirements of each business and its users.
CEO-level leadership is the key to corporate improvement
Symantecâ€™s latest product strategy announcements are targeted at helping people, businesses, and countries to focus on achieving their aspirations, instead of worrying about keeping their digital lives safe and protected. This provides a strong headline, but more importantly it acknowledges the demand from business and individual users for a change to the way information protection and storage services are provided.
Symantec recognizes the need for better execution across the security and information management industries, particularly within its own areas of influence. Product improvement is acknowledged to be the way forward; Steve Bennett and his team are looking to deliver solutions and services that can be tailored to customer needs. Lack of drive and ability to execute are often the stumbling blocks to achievement in the security and storage space, but Symantec already has many of the tools and the expertise to execute its board-level vision, and the office of the CEO is now providing the drive.
Andrew Kellett, Principal Analyst, Infrastructure and Security
2013 Trends to Watch: Security, IT017-004006 (October 2012)
2013 Trends to Watch: Mobile Consumerization, IT013-000187 (October 2012)
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